VimpelCom GC: Steppe ladder

They say it is at moments of decision that your destiny is shaped, and that is certainly true in the case of VimpelCom group general counsel Jeffrey McGhie. His decision to study Russian for his undergraduate degree in 1991 has led him to his life today, living in Amsterdam and overseeing the global legal affairs of the world’s sixth-largest telecoms group, one that originated in Russia and is listed in New York.

“Looking back, the decision to study Russian was a good one,” says McGhie. The American lawyer recalls how stories about Russia and the collapsing Soviet Union dominated the press in the early 1990s.

“I was fascinated by what was happening and developed a passion for Russian politics, language and culture,” he adds.

Learning Russian seems relatively simple compared with McGhie’s next move – from the US to Russia 10 years ago. In 2002 he swapped his associate position at Kirkland & Ellis in Chicago for an equivalent role in the Moscow office of Akin Gump Strauss Hauer & Feld.

In 2006 he faced another dilemma – whether to stay at a stable US firm or work in a Russian company. Again, McGhie took a risk and joined one of Akin Gump’s Russian clients, New York-listed OJSC VimpelCom, as chief legal officer.

“The risks I have taken in my career have paid off,” he admits. “The move from a US law firm to a Russian company was not an easy decision, but turned out to be a great choice for my personal and career development.”

A year after joining VimpelCom, McGhie was promoted to general counsel, aged only 36.

“Emerging markets such as Russia provide opportunities that may not be available in the West,” he explains. “I was promoted to the GC position at an age that was uncommon in, say, the UK.”

Gone Dutch

In 2009, a decision made by VimpelCom’s major shareholders created another opportunity for McGhie. In that year VimpelCom merged with Ukraine’s largest mobile phone operator Kyivstar in a $23bn (£14bn) deal. As part of the deal’s structure a new entity – VimpelCom Ltd, headquartered in the Netherlands, incorporated in Bermuda and listed in New York – was created, becoming the holding company of the merged assets.

Following the completion of the restructuring in April 2010, McGhie was promoted to group general counsel and moved to the holding company’s HQ in Amsterdam.

“VimpelCom has gone through an incredible transformation since 2009,” he says. “It has doubled in two years in terms of value, number of subscribers and number of countries in which it operates. It has also increased in complexity.”

For McGhie, the new title also presents challenges.

“The group general counsel role is focused on high-level critical issues of the group without diving into every aspect of the business,” he says. “It’s more an oversight and strategic role – very different from my previous one.”

In addition to dealing with different responsibilities McGhie has had to adopt a leaner approach to team staffing.

“When I first joined VimpelCom I inherited an established department,” he says. “Now I’m building a team from scratch. I have far fewer resources but need to handle critical matters for a huge and complex organisation. It’s been a real challenge, but interesting.”

Decentral line

The legal team in the group’s headquarters consists of eight lawyers. Across the group there are five main business units – Italy, Russia, CIS, Ukraine, and Asia and Africa. Each has its own head of legal and legal team. McGhie refers to it as a “decentralised” structure.

As a company listed on the New York Stock Exchange, US Securities and Exchange Commission-related issues, capital markets and M&A transactions, and groupwide compliance issues form the main function of the team in Amsterdam.

Significant litigations, procurements and partnerships with companies such as Google are also handled at the headquarters.

“The group legal team has a rounded profile and seasoned hands on board,” says McGhie. “We don’t have the luxury of hierarchy so we need lawyers who are experienced, competent and can operate independently.”

When big projects come up McGhie turns to external firms for extra manpower and expertise. For example, on VimpelCom’s two recent major M&A deals – its mergers with Ukraine’s Kyivstar and Italy’s Wind Telecom – the company instructed McGhie’s former firm Akin Gump as lead counsel.

“VimpelCom and Akin Gump had longstanding institutional ties before my appointment,” he says. “The firm has worked with us through difficult transactions and also worked hard to ensure the relationship stays strong. We have lots of trust in them.”

VimpelCom does not have a formal legal panel but has preferential relationships with a few international, mostly blue-chip, firms. For example, in Italy the company often uses White & Case for lending work, while Allen & Overy and Skadden are sometimes engaged for international dispute resolution.

VimpelCom’s local teams will look after local compliance, litigation and legal issues arising out of day-to-day operations. They also have the right to instruct local firms.

Having finished a number of large transactions McGhie’s main focus is now on internal efficiency.

“The group legal function is only two years old and the group has expanded significantly in a short time,” he says. “My priority is to fine-tune the legal team at headquarters as well as integrate and standardise processes among the local teams.”

McGhie has been travelling extensively to familiarise himself with the various business units and their legal teams.

Moscow-getter

Although McGhie has moved from Moscow to Amsterdam and his responsibilities now go far beyond Russia, he still finds himself cheering for Russia at the European Championships, and every now and then misses a bowl of borscht.

“Of course, practising law in Russia presents challenges,” he adds. “For example, its legal system is not as developed as in the West. It’s challenging to give clear and concrete legal advice, but you learn to live with it, adopting a different decision-making process, making assumptions and taking risks.

“Projecting onto Russia what we in the West think simply doesn’t work. We need to accept that it has a unique system and culture. The only way to understand it is to live there, eat local food, make friends and appreciate Russia for what it is. Yes, it has challenges, but it has gone through tremendous changes in the past two decades and is making amazing progress. I’m a believer in Russia.”